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Last Update: April 2015

Commentary on the recent development of price indices

FAO’s  price indices for the oilcrop complex dipped further during March. The strongest decrease occurred in the index for oilmeals, which dropped by 9 points (or about 5 percent), while the indices for oilseeds and vegetable lost respectively 2 and 5 points (or 1 and 3 percent). All three indices continue to fare at multi-year lows:  while the oilseeds and oils indices stand at 5-year lows, the price index for oilmeals has fallen to a 3-year low.       

The slide in international oilseed and oilmeal values continued to be driven by developments in the soy market, mostly reflecting good progress in South America’s bumper soybean harvest as well as rising global inventories and first anticipations of record soybean plantings in the United States for the 2015/16 season, which, if confirmed, could lead to yet another record-breaking global output. A slowdown in Chinese import orders as well as persistent U.S. dollar strength also weighed on global prices. However, with regard to South America, there continues to be uncertainty about the impact of heavy rainfall during February and March on soybean yields in Argentina. Market participants also expressed concern about the relatively slow start in export flows due to strikes and other problems at ports in Argentina and Brazil. As to rape and sunflower seed, their international quotations continued to weaken under the influence of depressed soybean values – notwithstanding lower than earlier anticipated supply estimates for the two oilcrops.
The vegetable oils index weakened again during March, after the marginal gain that was recorded in February. Palm oil values fell along with those for soyoil and all the other major vegetable oils, marking a 6-year low. The temporary rebound in palm oil prices observed in February actually lasted into the first week of March, but thereafter prices faltered in response to both subdued global import demand, notably from China, and a weaker Malaysian currency. Eventually, on a monthly basis, palm oil price decreased by about 3 percent. A more pronounced price drop was prevented by concerns that recent spells of dry weather in Malaysia might affect the country’s palm oil output in the coming months.


Components of the oilseeds price index: Soybeans, US, cif Rotterdam; Copra Phil./Indo., cif NW Eur. port; Rapeseed, Europe, 00, cif Hamburg; Linseed, Canada, No.1, cif NW Eur. port; Sunseed, EU, cif Rotterdam (please note that sunseed has been added to the index only in January 1976).

Components of the oils/fats price index: Soybean oil, Dutch , fob ex-mill; Sun oil, EU, fob NW Eur. port; Rape oil, Dutch, fob ex-mill; Groundnut oil, any origin, cif Rotterdam; Cotton oil, US, PBSY, fob Gulf; Coconut oil, Phil./Indo., cif Rotterdam; Palmkernel oil, Mal./Indo., cif Rotterdam; Palm oil crude, cif NW Eur. port; Linseed oil, any origin, ex-tank, Rotterdam; Castor oil, ex-tank Rotterdam.

Components of the meals/cakes price index: Soy meal, 44/45%, fob ex-mill Hamburg; Sun pell., 37/38%, Arg., cif Rotterdam; Rape meal, 34%, fob ex-mill Hamburg; Copra exp. pell., Phil., domestic; Palmkernel  exp., 21/23%, cif Rotterdam.